No Diet COLA for Seniors -- Fight the Freeze and Save Social Security

Let's thank Congressman Anthony Weiner, our single payer champ, for taking to the streets of New York again, this time to protest the Social Security Administration's policy decision to freeze the cost of living adjustment (COLA) on Social Security benefits. Unlike last year, when seniors and the disabled received a 5.8% increase in their monthly benefit checks, Social Security checks in 2010 and 2011 will remain stagnant.

The Arctic freeze, the first one in 35 years since the automatic COLA went into effect during the Nixon administration, comes at a politically bad time, when Wall Street executives, high off their no-strings-attached bank bail-out, are skipping around the conference room with $140-billion in salaries and bonuses, a three-year high in compensation.

Compare that to the average senior's Social Security check -- $1100 per month.

No belt-tightening for AIG, Goldman Sachs, or Bank of America.

Only for the old and disabled.

Some, like the AARP, are supporting the House-approved one-time $250 bonus to Social Security recipients. Instead of getting last year's COLA boost of roughly $600, they're getting an additional $80 per year, or $7 per month, enough to buy scrambled eggs and toast at Denny's.

Not much comfort in that.

From the words of one senior quoted in an Associated Press report, "We were good citizens all of our lives. We went to work, we lived by the book, we weren't on welfare, we didn't ask the city for anything ..."

Defenders of the COLA freeze argue the formula is tied to the Consumer Price Index and prices are down -- on oil. But utility costs are on the rise -- almost 30 percent. Medicare costs for hospitalization and doctor visits will be capped for most, though not all recipients, but prescription drug costs under Medicare Part D will increase because Part D is not tied to the COLA freeze.

Forget the formulas.

Remember the bigger picture. Ever since former President Roosevelt proudly handed the first social security check to another former president, Harry Truman, the right wing in this country has been driven to destroy the greatest safety net to emerge from the New Deal.

You hear it over and over. Social Security is facing a financial crisis. The Social Security trust fund will soon be bankrupt.

Pinocchio.

Social Security, with its monthly benefits to some 57 million seniors, widows, and disabled, is hardly bankrupt -- quite the contrary. In fact, the Social Security trust fund has an estimated $2 trillion dollars in it -- and, according to the Congressional Budget Office 2009 analysis of long term projections, this "rainy day" trust fund could last another 30-40 years before we have to dip into the other Social Security fund, the pay-as-you-go system, where this generation of workers pays for the benefits of current retirees, just as today's retirees paid for the benefits of the previous generation.

Let's look at the numbers. In 2008 Social Security collected 700 million dollars, and paid out only 500 million. The extra 200 million dollars went into the trust fund.

Impartial experts estimate that the trust fund will grow to more than 3 trillion dollars in the next eight years. In 2018 Social Security will begin drawing down the trust fund to supplement its regular income, in order to pay the benefits of the baby boomers.

In 2083, over 70 years from now, we will be looking at reducing benefits by 20 percent, unless, of course, we wisely decide to raise the salary ceiling on Social Security taxes.

To fund Social Security, employers pay a 6.2% tax while employees pay the other 6.2% -- up to $107,000 in salary. If a CEO of a health insurance giant makes $20 million in salary, bonuses, and stock options, that CEO still only gets taxed on the first $107,000.

Could anyone seriously be worrying about a small tax increase 30-70 years from now?

Probably not.

The real enemies of government, those masquerading as free-marketers, insist Social Security and Medicare are to blame for our deficit, now estimated at $1.4 trillion. Not true. In fact, it's the other way around. The federal government borrows from Peter to pay Paul, gobbling up special Social Security trust fund bonds to cover the costs of the Bush tax cuts and the trillion dollar occupations in Iraq and Afghanistan, not to mention the bloated military budget and ever-expanding bases.

Social Security is in danger, but not because money is running out. No, Social Security is in jeopardy because Republicans, with the help of Blue Dog Democrats, the same big business shills thwarting the public option, are building their case against our treasured old-age safety net in order to undermine our belief that government is the commons, here for the common good, to protect and provide -- with fire departments, libraries, police, national parks and public schools. Should the Right succeed in stigmatizing big government as creeping socialism, publicly-funded institutions will be up for grabs, for privatization, for profit, and for greed.

If we accept the 2010 COLA freeze, if seniors fail to grab their bullhorns, then we may be looking at another freeze in 2012, 2013 and beyond, while the Right continues to hammer away at the big lie -- that we cannot afford Social Security, that this entitlement program must be "re-adjusted" until we adjust ourselves right out of this safety net.

Safety nets are as old as time. The Greeks had olive oil, which they stockpiled for old age, when they could trade it for desired goods. The Old English set up poor houses to feed and clothe not just the poor, but the old. Reactionary forces, also as old as time, wanted to discourage the poor and the old from taking advantage of this safety net, so they required Poor House participants to wear a huge P on their chests.

In America, we must be ever vigilant about protecting Social Security, which means that the question of solvency must be addressed now, urgently, before the insolvency meme spirals out of control.

If it hadn't been for the people raising alarm, jamming phone lines to their congressional reps, President Bush -- roaming the countryside with his free market blather -- might have succeeded in privatizing our retirement money in a collapsing stock market, replete with auction rated securities frozen at auction and real estate mutual funds buried by toxic mortgages in Las Vegas.

But the beat goes on -- Senator George Voinovich, (R-Ohio), the guy who literally turned the lights off to shut down a committee hearing on constitutional rights violations, teamed up with Senator Joe Lieberman (I-Conn), the once-Democrat who introduced John McCain as the Republican Presidential nominee, to push legislation appointing a study commission reminiscent of the 1981 Greenspan Commission to overhaul Social Security. From Voinovich's press release -- "The proposal, dubbed the SAFE (Securing America's Future Economy) Commission Act, seeks to establish a commission that will examine our tax and entitlement programs. The hope is that the commission will offer recommendations on how to reform a system the senators deemed unsustainable and irresponsible."

The senators say they reserve the right to attach the "study commission" proposal as an amendment to a relevant bill.

Trouble in River City.

Under the proposal, an 18-member bipartisan committee, four lay people, and two members of the executive branch, will study the situation for one year before making recommendations that Congress will then accept or reject as a package deal -- an up or down vote, take it or leave it. Lieberman said "a special commission with fast track procedures is needed in this case because of the political difficulty of making such sweeping changes."

With enough fear-mongering, you might convince congress members who went along with the Iraq invasion and overnight bank bail-outs to approve a study commission's recommendation phasing in social security cuts over a ten year period -- until suddenly the country wakes up, opens its eyes and finds the entitlement program is at best an anemic image of its former self.

Here's how the hatchet job works. Politicians, like Lieberman and Voinovich, have to cut benefits without looking like they're cutting benefits. It was done that way before. In 1984 the Social Security age eligibility was raised on a gradual scale, moving the regular retirement age from 65-67. Also in 1984 Social Security, which was never before subject to income tax, became taxable for anyone whose income is greater than $25,000 per year.

Finally in 1998, the cost of living adjustment formula was revised to pay less. This change didn't even require a vote by Congress.

Only an administrative correction.

And there's no telling what new tricks a supposedly impartial commission might come up with for hidden cuts. One of the most dangerous ways that Social Security may be cut is through a balanced budget amendment or balanced budget legislation that would provide for across-the-board cuts in all government spending, to make up for budget shortages.

So what can we do about the pressure to cut Social Security? Do we have to sit still and let Social Security be cut again to protect the budget against growing deficits resulting from Mastercard wars and occupations?

Absolutely not.

As a candidate for Congress in California's 36th district, I am committed to protecting Social Security from any commission bent on slashing benefits or privatizing our greatest safety net, one of the most remarkable accomplishments of the New Deal.

Fight the COLA freeze.

Make some noise.

Long live Social Security!

Congressional candidate Marcy Winograd, of Progressive Democrats of America, is challenging Jane Harman (CA-36) in the June 8, 2010 Democratic Party primary. In 2006, Winograd mobilized almost 40% of the vote in only three months of campaigning. To learn more about her campaign, visit winogradforcongress.com or Marcy Winograd for Congress on Facebook.

 

 

Follow Marcy Winograd on Twitter: www.twitter.com/Marcywinograd

Comments

[Arlykat]

Yeah, so, what do we do to help in the fight to stop the misuse of social security payments right now? Who do we write, where do we complain, what petition do we sign? I'm in, just tell me which direction to aim please. Arly

[rf dude]

Decisions, decisions: this week, we can drive the golf cart to either the

" Keep yer Gover'mint hands off my Medicare " protest, or the

" keep yer Gover'mint hands off my Social Security" protest...

[111]

How come neither side ever says, "we can't afford that war"? And I never believed that we can't afford Social Security or the COLA. The Obama administration / Congress has just decided to spend the money elsewhere.

[David Hewitt]

This is ridiculous. The CPI is the only fair and accurate way we have to measure infaltion. Most economists will tell you that the CPI OVERstates inflation, so on most years, the COLA is actually higher than necessary to keep purchasing power the same. It also lags a bit; so if prices are rising now then next year's COLA will be large.

The fact is the CPI is down, inflation overall was negative for the previous year. If we want to be fair, and if the goal is to keep people as well off as they were before, we should actually have a negative COLA. The fact that social security payments are staying fixed is, in itself, a windfall for seniors who, on average, get the same money and can buy more with it. Once inflation starts kicking in again the COLA will be boosted to compensate.

[Oldchef]

No, you're ridiculous. Try living on $1,100/month.

[Daron Christopher]

These concerns are exactly what we are concerned about in the 36th district. With some of the most liberal and open-minded communities in the country, there is no reason we shouldn't be able to elect a proudly progressive fighter like Winograd. If she could get 40% of the vote on three months of work last time around, we should be able to send Jane Harman in 2010 if everyone rolls up their sleeves.

[tomocel]

approved 2% pay increase for fed employees, plus automatic pay increases for ex.,leg.,and judicial for 2010 .freeze 'cola' for two years and increase medicare premiums from $96 to $104 in 2010, and $104 to $120 in 2011. What is that???? Become a senior citizen and get craped on. Maybe I 'll get real mad and write a letter to AARP, that"ll scare them!!!!!

[NoSillyName]

This is not a big deal. The COLA never amounts to a large increase, more like $5-$12. I'd rather have the $250!!

[SEQUOIABISON]

Too many republicans look at social security as a government welfare program, it is not.

Social Security is more like a forced savings plan that begins to pay dividends when we hit 65.

I have been paying into the system since I was 12 years old and I do not expect any government official to be tampering with my hard earned savings.

We have established a covenant between generations to support this system.

W tried to divert the money in the social security system to Wall Street when he made a full court press to get it privatized.

Can you imagine how many seniors would not have any “security” right now if we had tied benefits to the earnings on Wall Street.

W led the charge to create a Bernie Maddoff type ponzi scheme that would have drained the money in the social security system and given it to the executives on Wall Street to invest for us.

I think it would be difficult to justify a COLA increase this year since inflation was so low and increases are based on that figure. But I do like the idea of sending seniors additional money anyway even if it is not attached to COLA and agree it should be the equivalent in cash to the last increase. Take it out of the Tarp funds and ask the tycoons to make adjustments instead of the seniors.

[propitiousmoment]

Have you shopped for groceries on a regular basis? Everything is going up in price. The supposed low rate of inflation is due to the supposedly low rise in the increase in oil prices, not consumer goods. Read the article again.

[Cyndy Keith]

The government is calling for accountability from the federal reserve. Who can get some accountability from the government? I have come to believe that the US government is one of the most corrupt in the world, and I am not just referring to the past administration. The current one is already showing that it is as dishonest as the last one.

[Tiger99]

Weiner looks and acts more like the man we elected in 2008 than the man we elected in 2008...

[gabberwok]

The point of cost of living increases is to adjust to the cost of living, aka inflation. If there is no inflation, there should be no cost of living increase. If the author thinks social security payments are too low, that may be a valid argument, but cost of living increases are not the way to do it - that'd be a plain old increase.

[nananance]

I live in Pennsylvania where, thanks to a deal Tom Ridge cut as governor, my electric bills are going to go up at least 30 percent in 2010.
My Medicare prescription drug plan supplement just announced it is increasing its cost by 30 percent. And it doesn't even cover my most expensive medications.
Like millions of other seniors, I worked hard for decades to be able to retire and to keep a roof over my head and enough to eat, depending on the money I put in my 401K and the promise of the Social Security safety net.
I am furious that while Wall Street bankers discuss giving out huge bonuses again, people like me who paid our dues have to think about whether we need to return to work as greeters at WalMART just to survive

[jmml]

Sorry, but the CPI is calculated with more than just oil prices. Cost of living has not just stagnated, it's gone down. Also, the people eligible for SS (by and large, seniors), have not been hardest hit by the recession. I don't think 250 is going to be the determining factor between starving and scraping by. Why put the country deeper into debt with money that won't even buy groceries for two weeks?

[propitiousmoment]

You must be another one of those people who doesn't buy groceries, gas, clothes, or prescription medications, or pay utility bills or rent. The price of everything meaningful in the life of the average person with fixed income, or anybody else except the filthy rich for that matter, has been steadily going up. I don't know what you spend your money on, but the rest of us are buying less for the same dollars as we did a year, two years, or three or five years ago. The money does not go as far. Whatever average they are using to figure inflation, it is skewed by some item or items that do not reflect the actual cost of living.

[jmml]

Really? Because the CPI is calculated using groceries, gas, apparel, medications, and utility bills. Guess what? They're all cheaper now than they were last year.

[PlaceboStudman]

Frankly, as a disabled person, considering the political and social climate centered around insurance reform these days, I'll take the $250 gladly, and realize that I am still a lot better off than a lot of people who don't even qualify for S.S. but should

[NoSillyName]

Me, too. Those COLA adjustments never amount to enough to make a difference.

[PlaceboStudman]

I figure, hey, if nothing else, that money will be well spent for Christmas this year